There is a possibility that the Oil and Natural Gas Corp (ONGC) will have to pay more than USD 13 billion in order to exercise its right of first refusal for purchasing Cairn India in the huge Rajasthan block.

Cairn India has about 70 percent of the operator interest in the 6.5 billion barrels of the Rajasthan block which deal is worth around USD 8.48 billion.

Vedanta is acquiring Cairn Energy shares at Rs. 355 per share. Cairn India is worth more than Rs. 67,355 crore or USD 14.6 billion. The stakes of Cairn India in the Rajasthan block will be priced at USD 13 billion.

ONGC has to decide fast regarding the payment as the deadline is September 7.

According to UK takeover rules, Cairn Energy Plc needs to get the approval of the shareholders besides other regulatory approvals for selling its shares before Vedanta's open offer becomes available from October 11. This necessarily means that it will have to issue a prospectus for the sale latest by mid-September.

The best deal ONGC now would be to seek the control for operating or managing the Rajasthan block in exchange for the Cairn-Vedanta deal.